AT&T Company’s PESTEL and SWOT Strategic Analyses

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Introduction

PESTEL and SWOT analysis methods are essential elements of organizational development and should be addressed before implementing the business strategy. A comprehensive evaluation of the firm’s strengths, weaknesses, and objectives is necessary to determine the course of action. Furthermore, regardless of the company’s performance, it is possible to enhance the productivity and efficiency of the organization by assessing the internal and external factors. The current business report analyzes AT&T Inc. from the perspective of PESTEL and SWOT and addresses the internal and external environment of the firm.

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Organization Assessment

Before concluding the PESTEL and SWOT analyses, it is essential to evaluate the current goals of AT&T Inc. and the implemented business strategies. AT&T is a global media company focusing on telecommunications and entertainment services (AT&T, 2021). Due to the advantageous position in the market, the firm’s primary objectives include environmental, social, and governance areas (AT&T, 2021). Namely, the environmental goals concern the reduction of greenhouse gas (GHG) emissions, achieving carbon neutrality, and the increase of sustainability awareness (AT&T, 2021). The social objectives regard improving educational programs, providing internship opportunities, and combat against discrimination (AT&T, 2021). Lastly, the company focuses on governance issues, such as supply chain development, supplier diversity spending, and enhancement of sourcing standards (AT&T, 2021). Ultimately, AT&T emphasizes environmental, social, and governance issues and has achieved immense results by focusing on these factors.

Focus on sustainable development (SD), including environmental, social, and economic factors, is an efficient strategy for organizational improvement.

According to research, SD has recently become increasingly popular in both academic and commercial fields of improvement (Silvestre & Țîrcă, 2018).

Furthermore, the implementation of SD has demonstrated great results within the business sector, and a large number of customers are supporting eco-friendly firms (Silvestre & Țîrcă, 2018). Accordingly, the success of AT&T shows that SD emphasis is an efficient business strategy with a few disadvantages.

PESTEL Analysis

However, there are always development opportunities, and PESTEL analysis is one of the most efficient tools to reveal the potential areas of concern. PEST or PESTEL is a comprehensive assessment of political, economic, social, technological, environmental, and legal factors that might affect organizational development (Kenton, 2020). The said characteristics vary significantly regarding the overall performance of the firm, and some constituents may be irrelevant to the development (Kenton, 2020). Therefore, depending on the organization, some external factors are more significant than others, which should be addressed in the analysis. The PESTEL assessment of AT&T Inc. is presented and explained below:

Table 1. PESTEL Analysis

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Areas of Development Issues of Concern
Political Political contributions to elections; memberships in trade associations; employee political action committee (AT&T, 2021);
Economic Dependence on financial institutions and fluctuations of the market;
Social Variation of customers’ preferences; evaluation of current trends; increasing demand of social platform content; diversity and inclusivity issues; shift to mobile to devices;
Technology Continuous innovation of technological devices and capabilities;
Environment Vulnerability to potential natural disasters; sustainable development trends;
Legal Pirated and copyrighted content issues.

Like most telecommunications organizations, AT&T might experience economic, social, technological, and environmental complications. Fluctuations in the economy affect all the companies with a significant presence in the market. Social trends should always be monitored to assess customers’ preferences and choose the appropriate strategy. Technological and environmental issues are also highly relevant to all organizations in the telecommunications industry. As a result, economic, social, technological, and environmental areas of development are highly relevant to AT&T and are standard concerns in the industry.

On the other hand, political and legal concerns described in the analysis are unique to AT&T. The organization practices a highly active political engagement with consistent contributions to local election parties, participation in trade associations, and political action committee (PAC) grants (AT&T, 2021). However, a notable position on state matters is also associated with certain risks; therefore, political engagement is an area of increased attention.

Consequently, legal concerns about pirated and copyrighted content are also highly relevant to AT&T (Hernandez, 2018). The company bans many customers for stealing content, resulting in increased lawsuits and attention to the organization (Hernandez, 2018). Ultimately, the described political and legal concerns are unique to AT&T and should be addressed accordingly.

SWOT and SFAS Analysis

SWOT and SFAS analysis models are effective strategies that determine the importance of internal and external factors and how well the company handles them. These methods evaluate the firm’s performance and demonstrate the necessity of implementing additional business strategies. SWOT assesses the company’s strengths, weaknesses, opportunities, and threats, while SFAS determines the significance of these characteristics (Kenton, 2021). The SFAS evaluation of AT&T Inc. is presented below:

Table 2. SFAS Analysis

How important to industry (0-1) How well does the company handle it (1-5) Weighted Score
Strengths:
Brand value 0 5 0
Infrastructure of wired and wireless communications 0 5 0
Weaknesses:
Large economic debts over the last year 1 2 2
Emphasis on the USA 1 3 3
Opportunities:
International growth 1 3 3
Sustainable development 1 5 5
Threats:
Highly competitive environment 1 3 3
Penalties from lawsuits 0 3 0

The current SFAS analysis demonstrates some of the most subjectively significant factors that could affect the development of the organization. The five identified areas of concern include two weaknesses (debts and national focus), two opportunities (international growth and sustainability), and one threat (competitors). The company might experience more complications; however, it is essential to determine the most significant ones to choose an appropriate business strategy. Concerning weaknesses, the total amount of liabilities have increased from $346,521B in 2019 to $364.864B in the second quarter of 2021 (Macrotrends, 2021). A decline in revenue and increased debt signifies the economic problems that should be prioritized in the business plan.

Consequently, while AT&T has a global presence, the company emphasizes the American segment, potentially losing many customers. The separate segment of the company (AT&T Latin America) provides services in Mexico and throughout South America; however, the European and Asian segments are relatively underdeveloped.

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Therefore, the two primary opportunities for the organization are international growth and sustainable development. At present, the company’s objectives align with the opportunities, and AT&T has made significant progress toward sustainability (AT&T, 2021). AT&T transparently indicates sustainable development as its primary objective, and this business strategy has greatly assisted the company (AT&T, 2021).

Consequently, there is currently a large number of competitors due to a high number of organizations in the telecommunications industry. Therefore, it is critical to developing innovative strategies or technologies to separate AT&T from the rest of its competitors and hold the top place in the market.

Conclusion

AT&T Inc. is the largest conglomerate providing telecommunications services in the world, which transparently indicates the efficiency of the chosen business strategies. Nevertheless, there is always room for improvement, and the current business report has revealed several potential areas for development. According to PESTEL analysis, political and legal factors present unique concerns to AT&T. Consequently, the SFAS method demonstrates such weaknesses as large long-term debts, focus on the national segment, and a highly competitive environment. Nevertheless, it is possible to solve these problems by addressing international growth and sustainable development.

References

AT&T. (2021). Measuring our impact: 2020/2021 progress toward our goals. 

AT&T. (2021). Political engagement report. 

Kenton, W. (2021). Strength, weakness, opportunity, and threat (SWOT) analysis.

Kenton, W. (2020). PEST analysis.

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Hernandez, A. (2018). AT&T shuts down services to customers who have pirated copyrighted content. 

Macrotrends. (2021). AT&T total assets 2006-2021. 

Silvestre, B. S., & Țîrcă, D. M. (2018). Innovations for sustainable development: Moving toward a sustainable future. Journals of Cleaner Production, 208, 325-332. Web.

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BusinessEssay. (2022, September 13). AT&T Company's PESTEL and SWOT Strategic Analyses. Retrieved from https://business-essay.com/at-and-ampt-companys-pestel-and-swot-strategic-analyses/

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BusinessEssay. (2022, September 13). AT&T Company's PESTEL and SWOT Strategic Analyses. https://business-essay.com/at-and-ampt-companys-pestel-and-swot-strategic-analyses/

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BusinessEssay. (2022) 'AT&T Company's PESTEL and SWOT Strategic Analyses'. 13 September.

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BusinessEssay. 2022. "AT&T Company's PESTEL and SWOT Strategic Analyses." September 13, 2022. https://business-essay.com/at-and-ampt-companys-pestel-and-swot-strategic-analyses/.

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